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KAVANAUGH HEARINGS CAN’T SUCK THE AIR OUT OF THE GRID SECURITY DEBATE: As hearings on Trump’s Supreme Court nominee Brett Kavanaugh threaten to quiet all other debates in Washington for the remainder of the week, the issue of electric grid security refuses to be muted.

First up on Thursday, the House Energy and Commerce Committee drilled down on a bipartisan bill to codify the Energy Department’s cybersecurity and emergency response office as an official part of the agency.

The agency has increased its role in grid security over the years, but Energy Secretary Rick Perry started a specific office with its own undersecretary to make grid security and emergency response a greater priority under the Trump administration.

A bill passed by the committee would codify Perry’s vision for the agency. And it’s something that is attracting support from Democrats.

Democratic support: Rep. Bobby Rush of Illinois, the energy subcommittee’s top Democrat, expressed deep support for the legislation at a hearing on modernizing the agency through the creation of the cybersecurity office.

The bill will “go a long way in helping to protect the nation’s infrastructure from hackers that will attempt to disrupt energy grid and cause untold to our economy,” Rush said at Thursday’s hearing.

Rush entered a letter into the record from all major electric utility trade associations expressing support for the legislation and Perry’s effort.

Industry wants the bill passed: “The Energy and Commerce Committee passed several bills this year aimed at strengthening our shared responsibility to protect some of the nation’s most critical infrastructure,” read a joint letter sent to the committee on Wednesday by the Edison Electric Institute, American Public Power Association, and National Rural Electric Cooperative Association. “Each would be a welcome addition to electric sector security practices.”

“The threat to the grid from cyber and physical attacks is real and growing,” the letter added. “Protecting and maintaining electric sector security and reliability is a top priority for our associations and our members.”

NATION’S GRID WATCHDOG STAYS AWAY FROM BAILOUT POLITICS: Jim Robb, the president and CEO of the nation’s grid watchdog, the North American Electric Reliability Corporation, said Thursday it has no role in the Trump administration’s effort to subsidize coal and nuclear plants, and has not been approached about providing advice about it.

“We don’t have any role in that discussion or in pricing and economic issues period,” Robb told reporters at NERC’s Washington D.C. office, in recognition of his first six months on the job. “Those become implementation issues. We on our own volition have started work of creating an assessment on how large unplanned retirements can affect reliability.”

Robb noted that the debate about saving coal and nuclear plants has become “highly politicized,” but he said NERC is focused on doing non-biased research about the grid’s health.

“My goal is to make sure our work remains technically unimpeachable so it is used to inform people, but not lean into ideological arguments around them,” Robb said. “Anytime you are putting out work on important issues people will pull out of it what they like or don’t like,” he added. “That risk is clearly there. We need to make sure our work is clearly and completely described to minimize that risk.”

He said he is focused on making sure the grid can remain reliable as it transitions away from coal to natural gas and renewables. He noted concern about a lack of gas pipeline infrastructure.

“Things are changing and changing rapidly,” Robb said. “We have a lot of tools based largely on a 1950s view of the world. There is a broad range of things as we work through this transition we need to stay on top of. It’s getting difficult to develop gas infrastructure now. We have to keep our eyes on 10 to 15 years down the road on these issues.”

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RICK PERRY: US FACES A ‘GOOD DILEMMA’ IN PRODUCING MORE OIL THAN IT CAN MARKET: Perry told reporters Wednesday that the U.S. faces a “good” dilemma in that the nation now produces more oil than it can feasibly get to market.

“We are now producing more energy resources than we are able to deliver,” Perry told a group of reporters at Energy Department headquarters. “It’s kind of an interesting dilemma. Good, I guess. If there is such a thing as a good dilemma.”

The next step, according to Perry, is to begin working on the pipelines and other infrastructure necessary to get the oil to market. “It’s essential that America build the infrastructure to deliver this record supply,” he said.

Perry held the rare roundtable with reporters to discuss his just-concluded trip to Russia and the Baltic region.

He noted that while he was in Russia, the Energy Information Administration announced its preliminary finding that the U.S. “is now the largest crude oil producer in the world.”

Energy dominance is always on his mind: Perry explained that it is his job to promote the president’s “energy dominance” agenda while abroad. One of the key parts of that agenda is increasing U.S. exports of oil, coal, natural gas, and advanced energy technologies.

Exports “are up across the board, whether it’s coal, oil, natural gas,” Perry said. “And I think we are just getting started.”

“We are now shipping [liquefied natural gas] to 30 countries on five continents,” he added.

Growing cooperation with Russia: “Our two nations aren’t only the world’s leading nuclear powers, they are also two of the biggest producers of energy,” Perry said. “As energy leaders, we share a number of interests.”

One of those shared interests is in developing cleaner ways to burn fossil fuels, “because the fact of the matter is, by 2040, over three quarters of the energy produced is still going to be fossil fuel based,” Perry said.

“And much of that demand is going to be supplied by the United States and Russia,” he added.

ETHANE IS THE NEXT BIG U.S. ENERGY EXPORT: If you don’t know what ethane is, you will. The high-in-demand chemical compound that comes from natural gas drilling and the fracking boom, is set to become the next big energy commodity from the United States, according to the Energy Information Administration.

The increase in demand for ethane — used to make ethylene, which is used to make everything from plastics to a host of industrial solvents — has driven prices up 95 percent higher for the petrochemical feedstock in September compared to where they were just nine months ago. That means there is more incentive than ever to produce it and get it to market.

Natural gas producers will usually not refine ethane from gas wells unless “ethane prices are significantly higher than natural gas prices” on an energy-equivalent basis. In that case, producers achieve greater revenue by extracting and selling ethane separately rather than leaving it in the natural gas stream, according to the EIA’s Week in Petroleum report issued Wednesday.

“With ethane demand now increasing, ethane spot prices at Mont Belvieu, Texas, averaged 52.6 cents per gallon, or $7.16 per million British thermal units,” EIA reported. That makes ethane price over $4 higher than the average natural gas spot price at the Henry Hub in Louisiana.

(By the way, in case you’re not familiar, British thermal units are the standard measure for natural gas, like barrels are used for oil).

This price difference for ethane is 400 percent more than it was in May, when the ethane premium averaged $0.80 per million thermal units.  

EIA is now tracking a number of ethane refinery plants popping up across the U.S. to take advantage of the resource, from the Gulf Coast to the shale gas fields of Pennsylvania. And overseas, the number of ethane plants is also increasing, where U.S. ethane exports will likely go, according to the agency’s report.

“U.S. ethane exports, which have become a significant outlet for U.S. ethane production, averaged 290,000 [barrels per day] in the second quarter of 2018,” EIA reported.

There are even special export terminals now that have the sole function of exporting ethane. One is located at Morgan’s Point in Texas and the another at Marcus Hook in Pennsylvania.

The ability to export ethane has had a ripple effect in other countries, which have built ethane refinery terminals specifically to refine the U.S. exports, according to EIA. Facilities include one in Bahia, Brazil, and others in India, the United Kingdom, Sweden, and Norway.

Canada completed a pipeline to connect ethane production in Ohio to expanded ethylene production refineries in Corunna, Ontario. That coincided with the early-2018 completion of the 50,000 barrel pwr days Utopia ethane pipeline linking Ohio to Ontario.

The Utopia pipeline, combined with two previous ethane pipelines, has shipped 90,000 barrels per day to Canada in the first half of 2018.

FEDERAL COURT UPHOLDS NEW YORK NUCLEAR SUBSIDY PROGRAM: The U.S. Circuit Court of Appeals for the Second Circuit on Thursday upheld the legality of New York’s program to prop up struggling nuclear plants for providing electricity without carbon dioxide emissions.

The court said the state subsidy program does not interfere with the power that the Federal Energy Regulatory Commission has over wholesale electricity markets, as charged by other power suppliers.

The three-judge panel acknowledged that New York’s program would keep nuclear plants alive, and raise costs for competitors, but said those impacts were “incidental.”

“To the extent the ZEC program distorts an efficient wholesale market, it does so by increasing revenues for qualifying nuclear plants, which in turn increases the supply of electricity, which in turn lowers auction clearing prices. But that is (at best) an incidental effect resulting from New York’s regulation of producers,” the court said in its decision.

State nuclear subsidy programs are winning in court: The ruling comes a few weeks after the U.S. Circuit Court of Appeals for the Seventh Circuit upheld a similar policy in Illinois.

Both states have adopted zero-emission energy credits, known as ZECs, in which the state issues credits to nuclear plants for generating carbon-free power, which they can sell on the open market to raise revenue.

FERC has filed amicus briefs in the cases affirming the programs do not preempt the agency’s legal authority set by the Federal Power Act.

Critics say the programs bailout failing nuclear plants in the state, that are struggling to compete with lower cost natural gas and renewables.

There is precedent being set for clean energy: Environmentalists cheered the rulings as a signal that courts consider states to have broad power to set clean energy goals, and impose policies to achieve them. For example, many states have renewable portfolio standards requiring generators to obtain more and more of their electricity from clean sources.

OWNERS OF AMERICA’S ONLY UNDER-CONSTRUCTION NUCLEAR PLANT AGREE TO FINISH BUILDING IT: After days of negotiations, the owners of America’s only under-construction nuclear plant agreed Wednesday to keep expanding it by adding two new reactors, a major victory for the fading industry and supporters of the zero-emissions power source.

The completion of the Georgia Vogtle plant’s new reactors, which are half finished, had been in doubt because the project is years behind schedule and billions of dollars over budget.

What’s in the deal: Utility Southern Company and the plant’s three other owners had sought to reach a deal to limit further cost increases for the nearly $28 billion project, more than double the original projection, after blowing by a self-imposed Monday deadline to decide whether to proceed with the expansion of the Vogtle plant.

Southern Company’s subsidiary Georgia Power, which owns 45.7 percent of the plant — making it the largest owner — agreed to absorb a greater share of the cost of any additional overruns, according to details of the agreement filed with the Securities and Exchange Commission.

The deal also gives Georgia Power the option to buy out the other owners if there are more than $2.1 billion in future cost overruns, or it can choose to cancel the project.

Banking money on nuclear: Southern Company announced last month that costs for the project had increased by $2.2 billion, which prompted a vote on whether to complete the plant, including the other three other owners: Oglethorpe Power, the Municipal Electric Authority of Georgia, and Dalton Utilities.

The Trump administration has firmly backed and invested in the plant, providing $3.7 billion in loan guarantees, viewing it as central to keeping alive the promise of clean energy from nuclear power, which emits no greenhouse gases. Vogtle has received a total of $12 billion in federal loan guarantees, with the Obama administration also supporting the plant.

The new reactors would be the first to be successfully built in the U.S. in more than 30 years if they are completed as expected, beginning with the first reactor in November 2021.

EPA ASKS SOUTH CAROLINA FAMILIES TO LEAVE HOMES FROM SUPERFUND CONTAMINATION: The EPA has asked four South Carolina families to evacuate their homes after finding industrial poisons from a toxic Superfund site deposited there by Hurricane Florence, according to a report Wednesday night.

In a statement to The State newspaper, the EPA said the storm washed sediment polluted with toxic PCBs inside four houses and into the crawl space of a fifth home. Test results showed “detectable concentrations’’ of PCBs that came from a former Burlington Industries manufacturing plant that the EPA is in the process of cleaning up.

PCBs, or polychlorinated biphenyls, have been linked to cancer for people exposed to it.

EPA said it took “immediate action’’ to notify residents, and has offered temporary accommodations to the affected families. The agency has been checking dozens of Superfund sites in the Carolinas and Georgia for impacts from Hurricane Florence, but up until now, had reported no problems.

EPA FINALIZES PLAN TO REMOVE RADIOACTIVE WASTE AT WEST LAKE LANDFILL SUPERFUND SITE: EPA Acting Administrator Andrew Wheeler announced Thursday a final plan to partially excavate radioactive waste at a notorious Superfund site northwest of St. Louis, Mo.

“This will end decades of uncertainty,” Wheeler said during a press conference at EPA headquarters. “This decision is compliant with the law. We owe it to the American public to clean up these sites as quickly and safely as possible.”

Former EPA Administrator Scott Pruitt first announced a proposed cleanup plan for West Lake earlier this year. His plan would remove the majority of radioactive material at the West Lake landfill within five years, and cost $236 million.

How the final plan shapes up: Wheeler’s final plan is $30 million cheaper and will be completed about one year faster, the St. Louis Post-Dispatch reported. The final plan slightly modifies its earlier proposal to partly remove the site’s contamination, using “more flexibility,” Wheeler said.

The EPA also plans to place a permanent cap, or cover system, over the site for long-term protection.

EPA said about 70 percent of the radioactivity at the site would be removed.

The West Lake cleanup has been delayed for decades: The West Lake landfill is one of the most high-profile Superfund sites in the country, staying on the National Priorities List since 1990.

The National Priorities List includes more than 1,300 locations that most urgently need cleanup of toxic chemicals.

West Lake made the list for containing thousands of tons of radioactive waste from the development of nuclear weapons during the World War II-era Manhattan Project.

EPA’s solution is a middle-ground: Residents and local activists have pushed the EPA for full excavation and removal of radioactive waste at the site.

The landfill operators, Republic Services and Exelon Corp., prefer the less costly “capping” method, rather than excavation. EPA’s final plan falls in the middle of those two options.

SECRETARY GENERAL SAYS CLIMATE CHANGE IS THE ‘ABSOLUTE PRIORITY’ OF THE UNITED NATIONS: UN Secretary General Antonio Guterres said Wednesday that combating climate change is the “absolute priority” of the international organization and underscored the need for faster action.

“Climate change is the defining issue of our time – and we are at a defining moment,” Guterres at the Informal Leaders Dialogue on Climate Change, held on the sidelines of this week’s General Assembly meeting.

“We have many priorities in the UN – peace and security, human rights, and development – but I would say that this is the absolute priority.”

The Paris goal is not being met: Guterres said the international community is “nowhere close” to meeting the overarching goal of the Paris climate agreement, which is to limit global warming to “well below” 2 degrees Celsius, or 3.6 degrees Fahrenheit, the temperature at which many scientists say the world would see irreversible effects of climate change.

That commitment was intended to the “bare minimum” of required action, Guterres said.

Planning for more action:  “We need to do more and we need to do it quicker: we need more ambition and accelerated action by 2020,” Guterres added.

Countries in the Paris agreement will meet in December in Poland to mark the progress of the deal, at the 24th Session of the Conference of the Parties to the UN Framework Convention on Climate Change, known as COP24.

RUNDOWN

New York Times Cheaper battery is unveiled as a step to a carbon-free grid

Wall Street Journal US makes shortlist for Saudi nuclear plant deal

Reuters Saudi Arabia in short-term oil fix, fears extra U.S. supply next year

Bloomberg World’s leading electric-car visionary isn’t Elon Musk